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Broadwater Asks Commerce to Override New York's Objection

Broadwater Energy LLC and Broadwater Pipeline LLC have filed an administrative appeal with the Department of Commerce asking the agency to overturn New York regulators' opposition to the construction of a proposed floating liquefied natural gas (LNG) terminal and associated pipeline to be located in the New York waters of Long Island Sound.

The notice of appeal was published in last Monday's Federal Register. Broadwater is seeking an override of the New York State Department of State's (NYSDOS) finding that the LNG project is not consistent with the state's coastal zone policies under the Coastal Zone Management Act (CZMA).

Under the CZMA, the Commerce secretary can override New York's objection if he finds that the project is consistent with the objectives or purposes of the CZMA or is otherwise necessary in the interest of national security. The project would have to further national interest in a "significant or substantial manner," the adverse effects of the project could not outweigh its contribution to national interest; and a "reasonable alternative" would have to be lacking.

In April Broadwater, a joint venture between TransCanada and Shell US Gas and Power, filed a request with the Federal Energy Regulatory Commission (FERC), as the lead agency for the Broadwater project, to consolidate the record for the project. The "consolidated record" includes all relevant information from FERC and other permitting agencies to be submitted by Broadwater in its appeal to Commerce (see NGI, May 5).

The proposed terminal has been designed and sited to be consistent with New York's coastal zone policies, according to Broadwater. "Despite the recent determination by the NYSDOS, we firmly believe that Broadwater is the best way to deliver a new supply of clean, affordable and reliable natural gas to the region without the onshore and near-shore environmental and safety impacts associated with other alternatives," said John Hritcko, senior vice president and regional project director for Broadwater Energy, to FERC in April.

Hritcko contends that the region needs Broadwater. "It is important to recognize that the Long Island, New York City and Connecticut gas markets are at the end of very long gas pipelines. As a result, this market region pays very high prices for natural gas relative to other parts of the U.S. The Broadwater project brings significant new gas supply into the region, and will serve to moderate regional gas prices."

When Broadwater Energy filed its application with FERC in January 2006 to build the LNG terminal approximately nine miles off the shore of Long Island, NY, and 11 miles from Connecticut, it immediately drew widespread opposition (see NGI, Feb. 6, 2006). Bowing in part to pressure from Connecticut officials, FERC in March imposed more than 80 environmental, security and safety conditions in its order approving the Broadwater LNG project (see NGI, March 24). But that did not appease the opponents.

The proposed Broadwater offshore terminal would have an average sendout capacity of 1 Bcf/d and peak sendout of 1.25 Bcf/d. Broadwater would operate the facility, while Shell would own the capacity and supply the LNG. The project is targeted for service in December 2010.

The LNG would be delivered by tankers, temporarily stored on the floating LNG facility, vaporized and then transported in a new 21.7-mile subsea pipeline that would have an offshore connection with Iroquois Gas Transmission, which extends across Long Island Sound. Broadwater estimates that an average of 118 tankers annually (two to three per week) would be needed to meet the project's planned sendout volume. The tankers would enter Long Island Sound from the Atlantic at the eastern end of the sound and travel down the middle to the terminal, away from Long Island and Connecticut harbors and not approaching the New York City harbor.

Broadwater estimates that approximately half of the natural gas sendout from the offshore LNG terminal would be delivered to New York City, about 25-30% to Long Island and the remaining 20-25% to Connecticut.

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